Flipkart denies report of 800 employees layoff

Top-level sources involved in the second round of exits told BusinessLine that the decision to initiate the process was made soon after the first lot of 400 employees were relieved of their duties.Vikas SN | ETtech | Updated: September 10, 2016, 17:46 IST

India's largest e-commerce marketplace Flipkart has denied that it is laying off employees, responding to reports of the e-commerce major laying off 800 employees.

"We completely and unequivocally deny any such move from Flipkart. This is completely false and baseless." said Nitin Seth, Chief Administrative Officer, Flipkart. "We can confirm to you that there are no plans for any layoffs in the coming months as reported."

Earlier today, The Hindu Business Line had reported that Flipkart is laying off 800 employees and its's technology team which has over 1,000 engineers, will be the worst affected team.

Seth told ETtech there are no "planned layoff exercise in any team including technology and corporate team."

"Our hiring plans are in line with the business goals and we are continuing to hire rich talent in our key strategic areas of focus." he added.

ET had reported in July that Flipkart was letting go of 700 to 1000 employees who have failed to meet professional expectations.

"The cleanup is a part of the process of making Flipkart a lean organisation," people directly aware of the development had told ET at the time.

In August, India's most valuable tech company Flipkart had changed its top management structure again, putting two key business units under the control of Kalyan Krishnamurthy, a senior executive from Tiger Global. This was the third major re-organisation at Flipkart this year,

Last month, Flipkart co-founder Sachin Bansal had also made a startling disclosure that he was replaced as chief executive "because of performance", emphasizing that the top management team was also not spared.

"Some of our targets have been missed and everyone, including the top management, has paid the price." Bansal had said in a monthly employee meeting in August.

Hiring 10,000 temporary staff for festive season

Flipkart is also hiring more than 10,000 temporary staff in logistics and last mile across the country to address the massive demand expected during the festive season, in addition to the new alternative delivery model introduced in May this year, Seth said.

Festive season tend to be the most crucial period for e-commerce companies and is expected to help them boost sales, after struggling with slower growth rates due to reduction in discounts and consumer incentives this year.

Earlier this week, a Kotak Institutional Equities report had estimated gross sales or the value of merchandise sold on ecommerce platforms, referred to as GMV, to reach $28 billion by 2020. This is one of the lowest for the market, with earlier reports estimating the market would be worth $50 billion by 2020

The report added that India's online retail market is expected to grow at a much slower pace as compared to China. The e-commerce market is expected to grow at compounded annual growth rate (CAGR) of 45 per cent between 2017 and 2020, as compared to 116 per cent CAGR growth in China between 2009 and 2015.

It will likely be more critical for Flipkart which is battling Amazon to retain its market leadership in the online retail segment. The company conducts its annual flagship sales event 'Big Billion Day' during this period. For this year's edition, Flipkart is mulling big changes including staggering it through October, in a bid to have greater control over deliveries and customer service, ET reported in July this year.